Revamping of Davis-Stirling Act Slated for 2013 or 2014

In 2002, the California Law Revision Commission (CLRC) was charged by then-Governor Gray Davis with clarifying ambiguities within the Davis-Stirling Act. (Civil Code Sections 1350-1378) to make it more “user-friendly” for homeowners and board members alike. After working fro many years with stakeholders, including a working group of attorneys, community managers and other industry professionals, the CLRC is behind the introduction of AB 805 (Torres), a two-year bill which must first be passed by both the Senate and Assembly and ultimately signed by the governor into law.

At this point, it is highly likely that AB 805 will make its way through both houses in 2012, with an effective date of either January 2013 or (the more likely date of) January 2014. Attorneys and managers alike will need continuing education to learn the new code provisions, sections and numbering.
Many managers wonder if associations should stop restating or amending governing documents until AB 805 becomes law. The answer is no, due to the uncertainty of when the law will become effective. It makes no sense to have associations exist with confusing and badly worded governing documents until the CLRC is done with its work. That said, however, you should make certain that association legal counsel reduce the number of references to specific code sections in the restated governing documents, and instead refer to the statute generally. For example, instead of creating a provision that the budget be distributed to the membership “in accordance with California Civil Code Section 1365,” the documents should state that the budget be distributed to the membership “in accordance with applicable provisions of current state and federal laws.”

I suggest any amended or restated documents acknowledge that AB 805 will change references to specific provisions in the Davis-Stirling Act and that any references in the CC&Rs include successor statutes. Finally, you can add a provision to the CC&Rs reserving the right to prepare a comparison chart that will identify the current statute and the updated statute, which will attach to the recorded documents. And, most of all, don’t forget your sense of humor – you’re going to need it.

Sandra L. Gottlieb, Esq. is a condo law and HOA legal expert with more then 20 years of experience. Contact her at slg@sghoalaw.com .